Lewis v. Monmouth Mutual Fire Ins.

The opinion of the Court was drawn by Danforth, J.

The execution and delivery of the policy, which is the foundation of this action, are admitted. The defence is, that the provisions of the statute of 1861, c. 34, § 5, have not been complied with, and fraud in obtaining the policy. It is alleged on the part of the plaintiff, that whatever defects there may have been in the notice of the loss, and the preliminary proofs required by the statute, they were waived by the defendant company. There appears to be no proof in the case in regard to the preliminary proofs, and, as the burden is upon the defendant, we may fairly presume that there were deficiencies in this respect. And, in the outset, the power of the officers of the company to waive these deficiencies is denied. Instances of this kind have usually arisen under the provisions in the Act of incorporation, or by-laws, of different companies.

*497 In some of the cases, a distinction has been made between stock companies and those which insure on the mutual principle.

It has been held that, in mutual companies, where the provisions relate to the formation of the contract, when they enter into and become a part of it, then the officers of the company cannot waive them even by express agreement. Mowbrey v. Shawmut M. F. Ins. Co., 4 Allen, 116 , and cases cited in the opinion of the Court.

On the other hand, when these provisions "do not touch the substance or essence of the contract, or affect its validity, but relate only to the form or mode, in which the liability of the company is to be ascertained and proved,” then the proper officers may waive them. Bartlett v. Union M. F. Ins. Co., 46 Maine, 500; Clark v. N. E. M. F. Ins. Co., 6 Cush., 342 ; Underhill v. Agawam M. F. Ins. Co., 6 Cush., 445 ; Angell on Ins., 301, and cases there cited.

In the case at bar, all things had been done by the parties, necessary to complete the contract of insurance. The validity of the contract, if obtained in good faith, is admitted, and the stipulation, a non-compliance with which is complained of, relates only to the manner in which the liability of the company is to be ascertained. This brings the case clearly within the decisions last referred to, and with these decisions we are entirely satisfied. The notice and preliminary proofs must necessarily be submitted to the officers of the company; it is for the express purpose of guiding their action; they must pass upon it, and it therefore comes within the scope of their authority to decide upon its sufficiency, and, if satisfactory to them, there is no cause for complaint.

This distinction is clearly stated in the case of Brewer v. Chelsea M. F. Ins. Co., 14 Gray, 203 .

It is, however, said, that the provisions under consideration are established by a public statute, alike applicable to all companies, and made for the protection of all. This is true, but how does it alter the case ? A by-law, not repugnant to the laws of the land, and certainly an Act of incor *498 porátion, whenever applicable, has the same binding force as a public statute. Though the statute was made for all, it was also made for each, and, to such companies as are in á position to invoke its aid, it gives the same protection as a by-law; no more, no less. Its stipulations may then as well be waived by any particular company as though the same stipulations were embodied in a by-law of that company. Hence, it is not uncommon for an individual or corporation to waive the provisions of a public statute made for their benefit; as in the case of a writ not indorsed when required, or the want of a bond in a replevin suit. These defects, though violations of express statutes, may be waived, not only by express agreement, but also by implication. Upon both principle and authority, we hold it clear that the • officers of the defendant company had the power to waive any defects there might have been in the preliminary proof required by the statute.

Have they done so ? This depends upon the facts proved. As there is no proof that Woodbury was a director of, or in any way connected with the company, his acts are not to be considered. Aside from this, the proof comes mainly from the letters of Wilcox, which are objected to as inadmissible. It is admitted that he was the secretary of the defendant company. By the 3d article of their by-laws, it is made the duty of the secretary to keep a record of the doings of the directors, as well as of the company. The records, then, were properly in his possession, and it becomes his duty to notify those interested of their doings.

We find, also, by article 6th of the by-laws, that the secretary is a proper officer to receive notice of a loss. His letters, then, are admissible so far as they admit a notice of the loss, or communicate the doings of the directors thereon.

This authority of the secretary, for this purpose, is fully recognized in Columbian Ins. Co. v. Lawrence, 2 Peters, 51, 52 ; reported also in 8 Curtis, 17.

Prom these letters we learn that some notice of plaintiff’s loss was received, and that the directors had action thereon. *499 It was the duty of the directors to pass upon the sufficiency of the notice and of all the preliminary proofs. Until these were satisfactory they had no occasion to go any further. Hence, when the directors find the notice or preliminary proofs insufficient, it becomes their duty to notify the assured of the defect. Appleton, J., in Bartlett v. Union M. F. Ins. Co., 46 Maine, 503, remarks: — "Having received notice of the loss, the defendants should have objected if it was not sufficiently formal, or was deficient in the information required by the by-laws.” In the case last cited, this question was discussed, and it was there held to be the duty of the directors to make known any objection that might exist to the notice, or preliminary proofs. The same is held in the cases already cited from Massachusetts, and those from the New York Reports cited by Angell.

In the case under consideration, the directors not only make no objection to the notice and proofs, not only do not ask for any further information in this respect, but put their defence, so far as they claim to have any, upon entirely different grounds, and such as are inconsistent with the defence now set up. Their whole defence, then, seems to have been an over valuation. They refer the matter to their secretary, not to defend, but for adjustment. A certain amount is offered for settlement. All the way through a claim is admitted, promises to pay made. These circumstances, in the cases already cited, and in many others, are considered abundant proof of a waiver of any non-compliance with the requirements of the law in regard to the notice and preliminary proofs.

The case of Clark v. N. E. M. F. Ins. Co., 6 Cush., 342 , is stronger than this. There the notice was similar, and the requirements similar, and yet mere silence in regard to the notice, after an investigation, was considered a waiver, though the claim was wholly rejected.

We see no alternative under the authorities cited, but to convict the directors of bad faith, or come to the conclusion that they intended to and did waive all defects in the notice *500 and preliminary proofs, if any such they found. We choose the latter.

As to the question of fraud, there does not appear to be sufficient proof to connect the plaintiff with any. There may be suspicious circumstances, but nothing to show that the plaintiff even had any motive to set the fire. He may have bought on speculation, but it does not appear that he made anything by the loss. We have no proof that the house was over valued. Fraud is not to be presumed, and in this case it has not been proved.

The amendment, if necessary, was allowable. We have already seen that the requirements of the statute, which it is said have not been complied with, and which are set out in the amended count, are not of the essence or substance of the contract. Therefore the same contract and the same cause of action is set out in the amendment as in the original writ. . Defendants defaulted.

Appleton, C. J., Davis, Kent, Walton and Dickerson, JJ., concurred.